Indrawati was also in the Global Tax 50
It is a post she previously held from 2005 to 2010.
Furthermore, between her stints leading the economy of the
world's fourth-most populous country, she worked as the
managing director and chief operating officer of the World Bank
Group. This is the World Bank's second-most senior position,
making her the most senior woman in the organisation's
She has also previously worked as an executive director at
the International Monetary Fund (IMF), and as the head of the
Indonesian National Development Planning Agency. She holds an
economics degree from the University of Indonesia and an
economics doctorate from the University of Illinois.
But her place in the Global Tax 50 comes not because of her
qualifications and career but because of the huge tax amnesty
undertaken by Indonesia this year and last, and the tax reform
following it. In a CNBC interview, she said she the tax reform
brought "investment certainty and the fiscal certainty"
The government launched the amnesty in July 2016, hoping to
repatriate around a quarter of the estimated IDR 4,000 trillion
($300 billion) of Indonesian money held offshore.
It offered staggered rates of 4% penalties for funds
declared between July 1 and September 31 2016; 6% for funds
declared between October 1 and December 31 the same year; and
10% for those declared between January 1 and March 31 2017.
Taxpayers could access lower rates still if they actually
brought the money back into Indonesia according to "specific
investment instruments… prepared by the Indonesian
government and the financial authorities", including government
bonds, state-owned enterprises' bonds, corporate bonds,
deposits in state-owned banks, collective investment contracts
and real estate investment trusts. In other words, the amnesty
offered preferable rates to those willing to boost Indonesia's
The amnesty, of course, came in for criticism as being a
'reward' for those who had avoided tax in the past. Indonesia
is a deeply unequal country, with the richest 1% of its
citizens controlling nearly half of the wealth. This criticism
is weighed against the benefit of having people enter the tax
While the level of repatriated income fell short of its
target, the tax amnesty overall was significant. Around $350
billion – equivalent to approximately 40% of
Indonesia's GDP – was declared by around 750,000
The taxpayer response to this initiative has helped to shape
the next steps in Mulyani's plans for tax reform.
Mulyani, who was once considered interesting enough to have
her phone hacked by Australia's spy agencies, wants to lift
taxation to 13% of GDP – it is currently less than 11%
– in the long term. She will do this through a number
of reforms spanning greater cooperation and data sharing with
other countries, improvements to the tax authority and bringing
more Indonesians into the tax system.
"The solution is the automatic exchange of information. If
there are Indonesian taxpayers who want to open a financial
account in other countries, we will have the ability to access
information regarding this," she said in February during the
launch of a joint report on inequality by Oxfam and the
International NGO Forum on Indonesia Development.
The country is expected to make its first information
exchange by September 2018.
Mulyani is also planning to issue a new regulation on taxing
In addition, she is reforming Indonesia's tax authority.
Only 27 million of Indonesia's 250 million citizens are
registered with the tax office, and only a million of these
regularly file annual reports, according to EY. The agency is
under-resourced and its staff are overworked.
In January she issued Minister of Finance Regulation No.
12/KMK.03/2017, allowing the tax authority to request access to
the banking records of those it suspects as having undisclosed
But, this year, tax revenues are well below target, forcing
the government into an unpalatable post-amnesty climb-down by
softening the rules for those who did not participate in the
amnesty will be softened.
Despite the tax office having repeatedly said that
unreported assets would be hunted down and tax evaders would be
hit with penalties amounting to 200% of the tax owned,
individuals and corporations will now only have to pay the rate
of income tax (30% for individuals, 25% for corporations) if
they voluntarily report their assets to the tax authority
before June 2019. Critics say this is a second tax amnesty to
plug gaps in the budget, but it will be the best option in the
long term if it gets more Indonesians paying tax.
"There is no such thing as tax amnesty number two," Ken
Dwijugiasteadi, chief of Indonesia's tax office, told a press
conference on November 27, a few days before his retirement.
"There was no investigation [against suspected tax evaders]
during [the] tax amnesty. Presently, though, investigations
Those whose assets are found by the authorities before they
self-report will still be subject to 200% penalties. So far,
since the amnesty, the tax office has hit 200 taxpayers with
bills totalling around $22 million.
Dwujugiasteadi was replaced on December 1 by Robert
Pakpahan, who Mulyani proposed for the role and is seen as a
calmer, more moderate leader for the tax office.
This is important for the way Mulyani wants to move
Indonesia's taxation system forward as she seeks a cooperative
relationship between government and business.
"I want to get support from all of you," Mulyani told an
Indonesian Employer Association CEO gathering in Jakarta in
February. "If I collect taxes, it doesn't mean I harass you,
but if my subordinates harass you, report them to me."
"From the Finance Ministry side, I promise to organise
ourselves and improve the institution so it can truly serve the
people," she said. "We are cleaning up this side…
Please, help us by cleaning up from the other side, too."
With the amnesty, and the extension of softer-touch rules
until 2018 for businesses that cooperate, Mulyani is holding up
her side of the bargain. The test of her success will be
whether Indonesia manages to creep towards the 13% taxation to
GDP ratio she has set as her target.